Prepare For A Green Future

It’s not just the big polluters that will have to change their ways. The carbon-conscious movement is catching up with investors too

- Peter Esho

One of the big discussions in politics is about our long-term energy policy and how our economic, social and environmental future should align with our values as a country. We hear a lot about net neutrality and transitioning to a carbon-neutral economy. I believe we’ll see more on the policy front as we head into the next federal election in 2022.

While I believe Australia needs the political will to back a carbon-neutral transition, my focus here isn’t politics but how ordinary investors can look beyond the rhetoric and incorporate these concepts into investment themes.

Nine out of 10 investors want their investments to align with their values, according to a survey published by Swiss investment bank UBS. I like to refer to this as a movement towards purpose-driven investing.

UBS conducted the survey in May this year among 3800 investors aged 25 or older with at least $1 million in investable assets split across 15 global markets. Researchers compared the findings with those from a study conducted in May 2020 with a similar sample.

Seventy-nine per cent of respondents in the new survey said the pandemic had prompted them to reassess what was important. Half planned to increase their charitable giving. Nearly 60% reported they were more interested in sustainable investing than they were before the outbreak.

Reason behind decisions

There are many loose terms such as ethical, sustainable and socially responsible investing and for some the definitions are still being formed. But what’s clear is that many investors are now starting to consider the “why” behind their business, career and investment decisions.